Germany says Vattenfall has no grounds to seek arbitration over nuclear phase-out

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BERLIN, May 8 (Reuters) - Swedish utility Vattenfall has no legal grounds to ask a U.S. arbitration court if it can claim 4.7 billion euros ($5.6 billion) from Berlin for forcing it to halt nuclear production, the German government has said in a letter.

The letter, seen by Reuters on Tuesday, was addressed to a German lawmaker who had inquired about the government’s position on Vattenfall’s attempts to seek damages from the International Centre for Settlement of Investment Disputes (ICSID).

As a non-German company, Vattenfall turned to the ICSID after Germany’s highest court ruled in 2016 that utility companies were allowed to seek limited damages from the German government over hastening the shutdown of nuclear plans after Japan’s Fukushima disaster.

Utilities E.ON, RWE and Vattenfall sued the German government, arguing the decision to close all nuclear plants by 2022 amounted to expropriation.

“In the pending arbitration case of Vattenfall against the Federal Republic of Germany, the federal government has requested that the arbitration be dismissed,” Deputy Economy Minister Thomas Bareiss wrote in the letter, dated April 21.

Vattenfall is expecting a decision from the U.S.-based ICSID this year.

Germany has rejected as baseless compensation claims by utilities, arguing its decision to end nuclear power was justified as nuclear risks had changed after the Fukushima meltdown in 2011. It also says a majority of voters back phasing out nuclear power.

Vattenfall, much of whose turnover is derived from its activities in Germany, had to permanently idle the Kruemmel and Brunsbuettel reactors in northern Germany in 2011 when the government decided to immediately close old reactors and accelerate the exit programmes for the remaining ones.